WORLD TRADE  
ORGANIZATION  RESTRICTED 
G/C/M/109 
29 February 2012 
 (12-1177) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
1 FEBRUARY 2012 
 
Chairperson: H.E. Ambassador Jüri SEILENTHAL (Estonia) 
  
 The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/3885; 
the proposed agenda for the meeting was containe d in document G/C/W/663.  The meeting proceeded 
on the basis of the following agenda.  
I.  CUBA - REQUEST FOR AN EXTENSIO N OF THE WAIVER CONCERNING 
ARTICLE XV:6 OF THE GATT 1994 CONTAINED IN THE DECISION OF 
15 DECEMBER 2006 .............................................................................................................. . 2 
II.  EUROPEAN UNION - REQUEST FOR A WAIVER ON ADDITIONAL 
AUTONOMOUS TRADE PREFERENCE S GRANTED BY THE EUROPEAN 
UNION TO PAKISTAN (G/C/W/640/REV.2) ....................................................................... 2  
III. CHINESE TAIPEI'S SUBSIDIES FO R THE PURCHASE OF DOMESTIC 
ELECTRONIC APPLIANCES - STATEMENT BY THE REPUBLIC OF 
KOREA ......................................................................................................................... ............. 5  
IV.  OTHER BUSINESS ................................................................................................................ .. 6 
A.  B
RAZIL 'S INCREASE OF THE INDUSTRIAL PRODUCT TAX ON THE AUTOMOTIVE 
SECTOR  .............................................................................................................................. ......... 6 
B.  APPOINTMENT OF OFFICERS OF THE SUBSIDIARY BODIES  ......................................................... 7  
C.  DATE OF THE NEXT MEETING  ..................................................................................................... 8  
 G/C/M/109 
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  I. CUBA - REQUEST FOR AN EXTENSION  OF THE WAIVER CONCERNING 
ARTICLE XV:6 OF THE GATT 1994 CONTAINED IN THE DECISION OF 15 DECEMBER 2006  
1.1 The Chairperson drew the Committee's attention to document G/C/W/662, dated 
24 November 2011, in which Cuba requested the inclus ion of an item regarding the extension of the 
existing waiver concerning Article XV:6 of th e General Agreement on Tariffs and Trade (GATT) 
1994 in the agenda of this Council.  He noted that this extension was for another five years and that 
the draft waiver decision attached thereto was an upda ted version of the previous waiver decision.  At 
the General Council (GC) meeting held on 30 November 2011, Cuba announced that it would request 
a renewal of the extension granted in December 2006.    
 
1.2 The delegate from Cuba stated that on 23 N ovember 2011, Cuba requested that the "Request 
for an Extension of the Waiver under GATT Article XV:6 of 1994" be included on the agenda of this 
Council.  She indicated that document WT/L/826, dated 18 November 2011 contained a report by the 
government of Cuba, for consideration by the GC at its meeting of 30 November 2011, and a request 
for an extension of the waiver of the provisi ons of Article XV:6 of the GATT 1994 approved on 
14 October 1996 and renewed on 20 December 2001, since Cuba was not a member of the International Monetary Fund (IMF).  She noted th at the current waiver expired on 31 December 2011 
and explained that the request for an extension wa s identical to that which was adopted in 2006 with 
the extension of the period of validity to 2016.  Cuba thanked the Chair and Members for the support 
and consideration given to this request.   
1.3 The delegate of Ecuador, when supporting C uba's request, stated that it was important to 
respect the basic principles of international la w and WTO non-discrimination principle.  Ecuador 
believed this request was valid and legitimate.  
 
1.4 The Chairperson proposed that the Council a pproves the draft waiver decision contained in 
document G/C/W/662 and forward it to the General Council for adoption. 
 
1.5 The Council so agreed. 
II. EUROPEAN UNION - REQUEST FOR A WAIVER ON ADDITIONAL 
AUTONOMOUS TRADE PREFERENCES GRANTED BY THE EUROPEAN UNION TO PAKISTAN (G/C/W/640/REV.2) 
2.1 The Chairperson drew the Council's atte ntion to document G/C/W/640/Rev.2 which was 
submitted by the European Union.  This document co ntained a revised request and draft decision for a 
waiver for the application of additional autonomous  trade preferences granted by the European Union 
to Pakistan.    2.2 The delegate of the European Union recalle d that on 18 November 2010 his delegation tabled 
a request for a waiver from the provisions of GATT Articles I and XIII in order to allow granting of 
additional autonomous trade preferences to Pakistan.  This request was first revised in October 2011.  
The EU request for a waiver allowing it to provide pr eferences to Pakistan in the form of temporary 
suspension of import duties on 75 items, was part of  an EU package of measures to help underpin 
Pakistan's recovery from the floods that hit that c ountry.  He furthered that the measure for which the 
EU was requesting a waiver was unprecedented in the WTO context and had raised legitimate 
systemic concerns. 
 2.3 During the discussions on this issue, the EU  had emphasized that this exceptional measure 
was in response to an exceptional situation and not meant to establish any kind of precedent.  The EU 
submitted a second revised waiver request containe d in document G/C/W/640/Rev. 2 which reflected  G/C/M/109 
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  the outcome of consultations held with a number of  countries that had expressed concerns about this 
initiative with a view to building a consensus.  He  stated that even though the EU had been very 
careful in the selection of products to be covered by  the original waiver request, and had made great 
efforts to take into account the interests of other WTO Members, especially the Least-developed 
Countries (LDCs), several Members had expressed con cerns on such trade concessions.  Therefore, in 
addition to providing updates to it s initial request, the second revisi on reflected the EU's additional 
flexibility in accommodating economic concerns expr essed by several Members during the process.  
He noted that the main changes were in Annexes I and II of the second revised request particularly 
concerning the list of Pakistani products on which im port duties would be unila terally and temporarily 
suspended by the EU.  More specifically, the EU would suspend import duties on 75 products of which 20 would be subject to tariff rate quotas rather than full liberalization while in the initial waiver 
request, only eight products where subject to tariff rate quotas.   
 2.4 The revised proposal struck a balance in terms of product coverage  and duration between 
lending support to Pakistan and minimizing, to the largest extent possible, negative effects on other 
Members.  In this regard, he clarified the followi ng:  (i)  the duration of the requested waiver was 
from 1 January 2012 to 31 December 2013 and, should the EU eventually request an extension of the 
validity of the waiver, this would have to follow th e rules of the Marrakesh Agreement and be subject 
to a specific decision by WTO Members in the GC;  (ii) regarding paragra ph 2 of the draft waiver 
decision presented as Annex 1 of document G/C/W/ 640/Rev.2, the EU engaged itself to promptly 
enter into consultations with any WTO Member on any matter arising from the waiver decision with a 
view to resolving the matter promptly and in a satis factory manner; and, (iii)  in the deliberations on 
its internal implementing regulation, the introducti on of the possibility to introduce additional tariff 
rate quotas and safeguard measures - should imports  from Pakistan for a specific product increase 
above a certain threshold, was being examined by the EU.  He therefore called on Members to take 
into account the changes made in the second revise d request which reflected the EU's additional 
flexibility in accommodating economic and systemic concerns as expressed by certain Members and 
called on the Goods Council to lend its  support to the waiver request. 
 
2.5 The delegate of the Kingdom of Saudi Arabia  thanked the EU for its presentation on this 
initiative and the revision to make it more balanced .  Saudi Arabia supporte d the request and urged 
the Council to do so. 
 2.6 The delegate from Brazil thanked the EU for introducing the new proposal and following 
instructions from his capital, he read the following  statement:  "In the November meeting of the CTG, 
Brazil expressed systemic concerns with regard to the EU's request for a Waiver on Additional 
Autonomous Preferences to Pakistan.  Additionally, my delegation had also po inted out specific trade 
concerns arising from the proposal.  Since then, intensive bilateral engagements, which led to 
adjustments to the EU's original proposal, and a thorough process of consul tation with the private 
sector in Brazil, allowed for the resolution of th e specific trade concerns.  In light of these 
developments, Brazil now finds itself in a position to accept the EU's request.  Nevertheless, my 
delegation wishes to emphasize that this constitutes an exceptional situation and that the acceptance of 
the EU's request should not be construed therefore, as a precedent for future practice.  In this context, 
Brazil takes careful note of the EU's recognition in th e introductory remarks to the waiver request that 
unilateral autonomous trade preferences are not a systemically appropriate means to address 
humanitarian crisis situations.  Finally, with a view to minimizing the impact on areas which are 
particularly sensitive for other Members, it is essential that the concession of additional trade 
preferences be not extended, under an y circumstances, beyond 31 December 2013." 
 
2.7 The delegate from Indonesia informed the C ouncil that his authorities supported the revised 
proposal and appreciated the constructive engagements by the EU and Pakistan throughout the 
consultations.  This confirmed the close and solid  relationship between Indon esia, Pakistan and the 
EU.  In his delegation's view, the revised propo sal should adequately cater to the Pakistani G/C/M/109 
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  Government's need to recover its economy while keeping its side impact s to the minimum as possible.  
Indonesia hoped that the waiver package would s ubstantially complement the humanitarian assistance 
that had been extended by the international comm unity, including Indonesia, in helping towards the 
expeditious recovery of Pakistan's economy. 
 2.8 The delegate from Bangladesh recalled that in  the wake of unprecedented floods in Pakistan, 
the EU came up with a proposal for giving unilateral trade concessions to 75 tariff lines of Pakistan's 
exports to the EU.  Bangladesh considered the proposal on humanitarian grounds, and appreciated the 
fact that the EU had undertaken necessary consultatio ns with relevant stake holders.  Bangladesh had a 
productive engagement with the EU and appreci ated the EU's positive spirit and constructive 
engagement to address specific Members' concerns.   
 
2.9 On the systemic integrity of the multilateral trad ing system in relation to the waiver, he stated 
that the proposal had its genesis on a unique s ituation emanating from the unprecedented flooding in 
Pakistan.  A waiver for a single country, in the context of preferences, was rare in the WTO and 
Bangladesh believed this departure would not set any precedent.  Any waiver under the WTO 
framework is time bound; thus, Bangladesh hoped that the current waiver would end in its due time 
paving the way for the restoration of the integrity of the multilateral trading system. 
 2.10 Bangladesh relied heavily on its garments expor ts and that the EU was one of its key trading 
partners in this area, he added.  Nevertheless,  Bangladesh had considered the waiver on exceptional 
circumstances and hoped it would achieve its intende d objectives, especially improving the plight of 
the affected people in Pakistan. 
 
2.11 The delegate of Argentina thanked the EU for introducing the revised request in document 
G/C/W/640/Rev.2 which sought to accommodate the concerns expressed by several delegations, 
including Argentina, at previous meetings of the Co uncil.  Since this was an exceptional situation and 
for a limited time period, Argentina supported the re quest made by the EU.  Argentina reiterated its 
solidarity with the people of Pakistan and hoped that it would continue in the path of economic 
recovery.  
2.12 The delegate of Peru stated that her de legation had no new comments to add to the revised 
proposal in G/C/W/640.Rev.2.  She thanked the EU for seeking a satisfactory solution which 
minimized the negative effects of its proposal on third countries.  Her delegation considered this 
proposal of an exceptional nature, a nd hoped it would not be repeated.  
 
2.13 The delegate of the European Union expressed  his delegation's gratitude and appreciation to 
all delegations who took the floor and all those w ith whom the EU had consulted throughout a long 
process.  He noted that the positive spirit of co-opera tion demonstrated that in this Organization, it 
was possible to move forward and take decisions, even those of an excep tional nature, when the 
circumstances were justified.  He reiterated that the EU saw these as exceptional circumstances if not 
unique circumstances, that did not create a preced ent as mentioned by many delegations.  He also 
took note of the statements made by delegations referring to the waiver's duration and thanked the 
WTO membership for its co-operation in this process. 
 
2.14  The delegate of Pakistan expressed his de legation's appreciation for the positive engagement 
of all Members with Pakistan and the EU.  He noted  that the EU's delegations in Geneva and Brussels 
worked hard to develop a consen sus package and, on behalf of his government, expressed gratitude to 
the WTO membership that stood by Pakistan in circ umstances of need and pain; this decision clearly 
demonstrated the human face of th e multilateral trade rules system. 
 
2.15  The Chairperson proposed that the Council appr oves the draft waiver decision contained in 
document G/C/W/640/Rev.2 and forward it to the General Council for adoption.  G/C/M/109 
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  2.16 The Council so agreed. 
III. CHINESE TAIPEI'S SUBSIDIES FOR THE PURCHASE OF DOMESTIC 
ELECTRONIC APPLIANCES - STATEMENT BY THE REPUBLIC OF KOREA   
3.1 The Chairperson stated that the delegation of Korea, in a communication dated 19 January 
2012, requested the Secretariat to include the follo wing item:  "Chinese Taipei's Subsidies for the 
Purchase of Domestic Electronic Appliances - Statement by the Republic of Korea".   
 3.2 The delegate of Korea stated that his delegation, as well as other WTO Members, had 
concerns about Chinese Taipei's recent measure ai med at providing subsidies for the purchase of 
domestic electric appliances.  This scheme was prom ulgated on 27 December 2011 in the form of a 
Decree by the Minister of Economic Affairs of Chinese Taipei and, accordingly, consumers who 
purchased washing machines, air-conditioners or re frigerators which:  (a) were domestically 
manufactured or, in other words, manufactured in Chinese Taipei, and (b) satisfied certain energy 
efficient requirements, would be eligible to receive subsidies from the Chinese Taipei power 
company.  The amount of subsidies per product was around US$66 which was significant since these 
products were not expensive luxury items.  He noted  that the scheme was temporary in nature as it 
would remain in effect for three months, from 1 Janua ry to 31 March 2012.  According to the decree, 
the subsidies program had three purposes (i) energy saving (ii) support for carbon emission reduction and, (iii) boosting of the domestic economy.    3.3 Korea believed that the scheme was inconsis tent with Chinese Taipei's obligations under the 
WTO rules for two reasons:  first, the subsidies to be provided under the scheme appeared to be 
germane to the "prohibited subsidy" within the meaning of Article 3.1(b) of the Agreement on 
Subsidies and Countervailing Measures.  They would pertain to what Article 3.1(b) provides for as 
"subsidies contingent upon the use of domes tic over imported goods" because only those products 
made in Chinese Taipei were eligible for the subsid ies.  Second, Korea considered the scheme to be 
inconsistent with Chinese Taipei's obligations  under the GATT 1994 National Treatment provisions.  
He also noted that this type of scheme was not ne w; that Chinese Taipei maintained a similar scheme 
for six months from October 2008 to March 2009 wh ich cost Korean manufacturers US$100 million 
in lost sales.  Korea also had a systemic concern that this type of practice might set an unhealthy 
precedent; thus, the WTO system and the DSU mechan ism would need to be more instrumental and 
effective in preventing the recurrent  use of such temporary measures. 
 
3.4 In Korea's view it was equally disappointing and regrettable that Chinese Taipei had decided to go ahead with the scheme, d espite the fact that Korea had expressed its legitimate concern on 
numerous occasions, the most recent, in December  2011 when Korea conveyed these concerns to 
Chinese Taipei and explained that the envisaged scheme would be WTO inconsistent and would cause 
a loss of US$170 million in sales for Korean manufacturers.  Finally, he recalled that on the occasion 
of the MC8 on 15 December 2011, Korea, Chinese Taipei and 21 other WTO Members signed up for an initiative against growing trade protectionism am id the current global downturn.  He then urged 
Chinese Taipei to repeal the scheme expeditiously an d welcomed the opportunity to work closely with 
Chinese Taipei and other WTO Members in moving forward to address this, as well as other important issues in a timel y and appropriate manner. 
 
3.5 The delegate of the United States rec ognized that Chinese Taipei's programme could 
potentially break the National Treatment Principle and prohibited subsidy issues.  Her authorities took 
this seriously and requested additional information from Chinese Taipei in or der to fully analyse the 
matter.  The United States also en couraged Chinese Taipei to notify,  at the appropriate time, any 
subsidy measures, as required under the Agreemen t on Subsidies and Countervailing Measures. 
 G/C/M/109 
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  3.6 The delegate of the European Union also  requested additional information from Chinese 
Taipei on the measures so as to analyse whether or  not they complied with the WTO obligations.  The 
EU was carefully reviewing the issue; was inter ested in Chinese Taipei's response, and called on 
Chinese Taipei to make sure the scheme was in  full compliance with their WTO obligations. 
 
3.7 The delegate of Chinese Taipei thanked Kore a for having informed his delegation in advance 
of the inclusion of this item on the agenda.  As  the information was received during their lunar new-
year holiday, he had not yet received instruction fro m capital on this matter.  His delegation had taken 
note of the statement by Korea and comments by th e US and EU and would get back to them at the 
earliest opportunity. 
 
3.8. The Council took note of the statements made. 
 IV. OTHER BUSINESS 
A. B
RAZIL 'S INCREASE OF THE INDUSTRIAL PRODUCT TAX ON THE AUTOMOTIVE SECTOR  
4.1 The Chairperson stated that the first item  under "Other Business" was a request made by 
Australia at the start of the meeting, concerning "Brazil's Increase of the Industrial Product Tax on the 
Automotive Sector".   4.2 The delegate from Australia informed the Council that the increase in Brazil's industrial 
product tax on the automotive sector was announced  in September 2011 in Government Decree N° 
7567.  This measure came into effect on 16 D ecember 2011 and his delegation's understanding was 
that this measure increased the tax on both, impor ted and domestically produced motor vehicles, but 
provided an exemption only for vehicles domestica lly assembled.  The criteria to this exemption 
included local content requirements which varied depending on the various preferential bilateral 
automotive agreements that Brazil had.   
 
4.3 Australia noted that this issue was raised at both the meetings of the Committee on Market 
Access in October 2011 and CTG in November 2011 with comments from Australia, Korea and 
Japan.  His delegation had both systemic and commerc ial concerns with the nature and design of the 
measure, particularly as it appeared to affect both imports of motor vehicles as well as potentially 
automotive parts and automotive services.  He reca lled that Brazil, at the Committee on Market 
Access meeting in October 2011, stated that the meas ure was temporary and was due to expire at the 
end of 2012.  However, protectionist measures th at impede imports could seriously undermine the 
operation of a market and effectively reduce compet ition and the so-called temporary measures could 
have long-term deleterious effects for exporters  establishing relationships with importers and 
consumers. 
 
4.4 He also recalled that at a meeting in Davos in January 2012, some Members in a Ministerial Statement, "underlined the importance of resistin g protectionist tendencies in the current global 
economic scenario including competiti ve devaluation and regulatory measures that conceal their real 
protectionist ends".  Since the Brazilian delegation noted at the October 2011 meeting, that it was at 
the disposal of any delegation that might be inter ested in clarifying this issue, his delegation hoped 
that it would be possible to discuss with Brazil to  better understand how this  measure would operate 
and also looked forward to discussing this matter with Brazil.  4.5 The delegate of Japan stated that the meas ure by Brazil had been implemented despite the 
concerns expressed by a number of delegations at previous CTG and Committee on Market Access 
meetings.  Japan supported the statement by Austra lia and would closely monitor this issue.  He 
requested the Brazilian delegation to conduct discussi ons with his delegation and other interested 
delegations as necessary.  G/C/M/109 
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  4.6 The delegate of the European Union shared the concerns by Australia about the Brazilian 
decision to grant tax advantages to vehicles with at least 65 per cent of local content.  The measure 
appeared to be incompatible w ith the basic WTO Non-discrimination principle since Brazil would be 
treating domestic products in a more  favourable way than imported goods.  He noted that it was also 
at odds with the overall G-20 commitments and the commitments of Members to refrain from taking 
protectionist measures.  The EU expected Brazil to remedy this situation promptly. 
 4.7 The delegate of Korea recalled that at th e previous CTG meeting in November 2011, his 
delegation highlighted the importance of addressing this issue in an urgent and appropriate manner.  It 
was regrettable that Brazil had kept the measure in place.  Korea looked forward to this measure being 
removed expeditiously and would work  constructively with Brazil and ot her delegations to ensure that 
this happened.   4.8 The delegate of the United States shared many of the concerns expressed by previous 
delegations regarding the Brazilian measure. 
 
4.9 The delegate of Hong Kong, China associated her delegation with the previous interventions. 
Her authorities had systemic concerns on Brazil's automotive tax measures which were likely to be 
inconsistent with Articles I a nd III of GATT 1994 and were largely protectionist.  She called on 
Members to work together to resist any form of protectionism and urged Brazil to bring the measure 
into conformity with the relevant WTO Agreemen t.  Hong Kong, China would closely monitor this 
measure. 
 4.10 The delegate of Colombia expressed concerns  regarding the economic impact of the Brazilian 
measure; Colombia considered it incompatible with  different commitments that Brazil had undertaken 
in the WTO and looked forward to finding a solution and discussing the issue both multilaterally and 
bilaterally. 
 
4.11 The delegate from Brazil tha nked the delegations who took the floor for their interventions 
and recalled that Brazil replied on this subject at  the last CTG meeting on 7 November 2011.  In 
response to the queries raised by delegations, he reit erated the following: (i) all relevant legislative 
acts (Provisional Measure MP540/2011 now convert ed into Law 12546/2011, and Decree 7567/2011) 
had been published in a fully transparent manner and were publicly available on the internet; (ii) the 
measures put in place were provisional; (iii)  th e exceptional circumstances which prompted the 
temporary modification of Brazil's tax regime for the automotive sector could have justified the adoption of trade remedies provided for in the WT O Agreements with potential high trade restricting 
impact; (iv)  the objectives were the same ones that , right after the onset of the 2008 global financial 
crisis, led to the massive governmental support channe lled to the auto industry in several of the key 
world markets, -mostly as either grants and/or loan s;  (v) in the recent past, Brazil's domestic auto 
market had experienced a substantial increase in car imports, a trend intensified by the appreciation of 
the Brazilian Real; and, (vi) exporting countries w ith interest in the Br azilian automotive market 
would continue to benefit from th e overall economic scenario in Br azil and were likely to remain 
competitive in a rapidly expanding Brazilian market.  He also noted that his delegation as well as the 
competent authorities in Brasilia remained at the di sposal of all interested Members to discuss the 
adopted measures.  4.12  The Council took note of the statements made.  
 
B. APPOINTMENT OF OFFICERS OF THE SUBSIDIARY BODIES  
4.13 The Chairperson informed delegations that the General Council would deal with the issue of 
Appointment of Officers to the WTO bodies at its ne xt meeting.  He intende d to begin consultations 
for the appointment of officers to  the subsidiary bodies of this Council for 2012, in accordance with G/C/M/109 
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  the guidelines set out in document WT/L/510, during the week of 20 February 2012
1.  Members 
would be informed of this immediately after the next meeting of the General Council.   
 C. D
ATE OF THE NEXT MEETING  
4.14 The Chairperson informed the Council that the next CTG meeting would take place on 
Friday, 30 March 2012 and that the agenda would close on Monday, 19 March 2012. 
 4.15 The meeting was adjourned. 
  
__________  
 
                                                      
1 Following the discussions in the General Council meeting on 24 February 2012, consultations were 
postponed to the week of 5 March 2012.